Question

In Problem 15, Computers Unlimited wants to better meet demand at the four universities it supplies. It is considering two alternatives: (1) Expand its warehouse at Richmond to a capacity of 600, at a cost equivalent to an additional $6 in handling and shipping per unit; or(2) Purchase a new warehouse in Charlotte that can supply 300 units with shipping costs of $19 to Tech, $26 to A & M, $22 to State, and $16 to Central. Which alternative should management select, based solely on transportation costs (i.e., no capital costs)?